Trade from Space: Shipping Networks and the Global Implications of Local Shocks

42 Pages Posted: 17 Dec 2019

See all articles by Inga Heiland

Inga Heiland

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Andreas Moxnes

University of Oslo - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Karen Helene Ulltveit-Moe

University of Oslo - Department of Economics; Centre for Economic Policy Research (CEPR)

Yuan Zi

University of Oslo

Date Written: December 2019

Abstract

This paper examines the structure of the shipping network and its implications on global trade and welfare. Using novel data on the movements of container ships, we calculate optimal travel routes. We then estimate the impact of a shock to the network on global trade by means of a natural experiment: the 2016 Panama Canal expansion. Trade between country pairs using the canal increased by 9-10% after the expansion. While the building costs were borne by Panama alone, a model-based quantification shows that the welfare gains were shared by many countries, due to the network structure of shipping.

Keywords: Shipping networks, Trade

JEL Classification: F14

Suggested Citation

Heiland, Inga and Moxnes, Andreas and Ulltveit-Moe, Karen Helene and Zi, Yuan, Trade from Space: Shipping Networks and the Global Implications of Local Shocks (December 2019). CEPR Discussion Paper No. DP14193. Available at SSRN: https://ssrn.com/abstract=3504623

Inga Heiland (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Andreas Moxnes

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Karen Helene Ulltveit-Moe

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Yuan Zi

University of Oslo ( email )

PO Box 6706 St Olavs plass
Oslo, N-0317
Norway

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